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Long-term unemployment at all-time high, looks like it's here to stay

Today, I wrap up Unemployment Week here at the Ticker by looking at long-term unemployment, which is at an all-time high.

Last Friday, the government told us that the official unemployment rate in the U.S. is 10.2 percent, the highest since the crippling early '80s recession.

But that only tells us part of the story, so I've been unpacking the data all week.

On Monday, I told you that the U.S. unemployment rate is now higher than Europe's (even France's!). On Tuesday, I examined the alarmingly high teenage unemployment rate (27.6 percent). Wednesday was Veterans Day, so I took at look at unemployed vets, focusing on the high joblessness among veterans of the recent wars in Iraq and Afghanistan. Yesterday, I examined unemployment among Hispanics.

Today, it's long-term unemployment, which the government defines as being unemployed for at least 27 weeks.

The percentage of Americans who have been unemployed for more than six months is at its highest level since the government began keeping this statistic in 1948, according to data from the Labor Department's Bureau of Labor Statistics.

According to the BLS data, 35.6 percent of all unemployed Americans have been out of work for at least 27 weeks. That number was hit in September and held in October.

That's a pretty staggering number and it speaks to the length and depth of the Great Recession, which began in December 2007 and officially ended in September, when GDP turned positive. Though it probably doesn't feel that way for the unemployed.

The 35.6 percent figure is much higher than highs set during the most recent big recession, the one that lasted from January 1980 to November 1982. As I've written before, unemployment is a lagging indicator, and unemployment rates continue to rise after recessions end. The previous high for long-term unemployment prior to this recession came in June 1983, clocking in at 26 percent.

If you look at the BLS data, long-term unemployment is a fairly recent phenomenon.

Double-digit long-term unemployment didn't kick in on a consistent basis until 1958. Prior to that, it hung in the low-to-mid single digits, bottoming out at 2.9 percent in May 1953. These were the postwar boom years, driven by manufacturing and construction, as Americans helped build new suburbs all across the country.

Double-digit long-term unemployment really took hold in 1959, as the nation entered a recession, and then another one in 1960, creating a six-year funk. But then the Vietnam War years kicked in, young men were drafted into the military, and hiring in the military-industrial complex pushed long-term unemployment back down into the single digits until the mid-'70s oil crisis recessions.

By 1991, however, double-digit long-term unemployment took firm hold and it looks like it's simply part of the economy now, thanks to lengthier unemployment benefits and shifting labor patterns, as more low-end jobs go overseas.

Here's what's important to take away from this: Long-term unemployment appears to have decoupled from the overall unemployment figure.

At 10.2 percent, the national unemployment rate is near but not higher than the nation's all-time unemployment rate of 10.8 percent, set in November 1982.

But the long-term unemployment rate in November 1982 was 19.5 percent and topped out during that recession seven months later at 26 percent.

Another way to look at it: During the previous worst recession, in the early '80s, the long-term unemployment rate was a little more than double the national rate.

During this recession, it's more than triple the national rate. And it's closing in on four times the national rate.

Those long-term unemployed workers create a lasting and heavy burden on the system, which will not only impede recovery -- think of an overloaded airplane struggling to get off the runway -- but may also build in higher unemployment rates than we're used to, for good.

I have worked steadily, without gaps of more than a few weeks, since I was 21. I am now 54 and have been out of work since the start of the year. I have had about one interview per month but have received rejection letters stating other candidates were a good fit, that the company wanted "new blood", and other hints that I was too old. Am I too old?

And now my spouse is about to risk a layoff. If both of us are without work for too long, I can only contemplate the worse. Suicide would be the only solution.

"I have worked steadily, without gaps of more than a few weeks, since I was 21. I am now 54 and have been out of work since the start of the year. I have had about one interview per month but have received rejection letters stating other candidates were a good fit, that the company wanted "new blood", and other hints that I was too old. Am I too old?
And now my spouse is about to risk a layoff. If both of us are without work for too long, I can only contemplate the worse. Suicide would be the only solution.
Posted by: Outofluck | November 13, 2009 1:18 PM"

Please don't give up the fight...
I have worked 15 days in three years and I am not...
things may not be great...
but never give up faith or hope...
never...

Corporate America no longer wants to pay 40+
age people. With health premiums rising faster than wages, it is not in their interest to hire older workers. In the current healthcare environment, who's health premiums would you like pay?
20+ or 40+, you do the math.

At this point, I would rather get an Obama check and pursue my jewelry design hobby than to be disappointed by interviewers telling me that I'm "too old" at 48!! Jobs are leaving NJ almost by the week. And there are too many people losing jobs. This current economic system is an 18th century system that doesn't fit a 21st century recession. It's more than time for people to work out their own economic system. Because this current one doesn't work. Obama does not have a clue as to what to do anymore. To Outofluck: Suicide is a permanent solution to a temporary problem. Please don't give up.

CONGRESS must consider un-Employment as a JOB!? - The problem is that being un-Employed for long, does Not $Pay well! If elligible for unemployment Benefits, then swell,- but, only for a while. Then What? - How does CONGRESS explain "BAILING-OUT",- (for $Trillions), the Criminal BANKSTERs, WALL-STREET Swindlers, and the AIG / GOLDMAN SACH's Traitor-types!!?? - And guess what?- CONGRESS does next to "NOTHING" at all, to help the American CITIZENS, whom are suffering the most!!?? Nothing for us Citizens, whom are the Owners/Representatives of this Constitutional REPUBLIC!! DA?! Congress does Not 'work-for', nor was Elected by these Corporate / Bankster Globalist CONs!! NO where in the CONSTITUTION does it mention 'we-the-corporations'!? The only way to see it, is that CONGRESS has to be in the Betryal-Bed with the CRIMINALS!! Now what? What will the few Patriot Members of OUR CONGRESS do that is right, Patriotic,- and demand PROSECUTION & PRISON for their' fellow Turn-Coats? - Or will they also defend these Congressional Enemies of WE-the-People??!! - Hurry up CONGRESS, - Your' Electorate Employer-Leader-Public are tired, hungry, and waiting for You to do what You are paid to do! - Uphold the CONSTITUION, Obey Your OATHs-of-Office, defend Our Homeland, and most Important- PROTECT & SUPPORT the U.S. Citizens from Harm,- from all Enemies, without & within!!! -- jward52

THERE IS A WAY TO CREATE JOBS QUICKLY by giving a tax credit to businesses that plow up to 20% of net profits back to employees on a regular basis.
Even the grandaddy of CONSERVATIVES, Ronald Reagan, was a strong advocate of "experimenting with various forms of profitsharing to expand capital ownership"
(p. 36 in the book PAYBACK at www.profitsharinguprising.com)
John Huddleston, former Chief of the Budget and Planning Division at the International Monetary Fund says, “it (A PROFIT-SHARING TAX CREDIT) may be the most practical way to get Congress engaged.”
We could begin with a tax credit for businesses that plow up to 20% of net profits back to employees, on a regular basis (monthly or quarterly).
It will increase household income substantially, especially if there are 2 working adults.
It will create a built-in, regular economic stimulus. Consequently, increasing supply as well as demand. More demand = more jobs.
Old dead-end jobs are transformed into well-paid partnerships.
It will pay for itself from increased productivity and a wider tax base.
The solution is right in front of our nose!
Help spread the word. Forward the book to all your colleagues. It is Free.

Outofluck wrote "I have worked steadily, without gaps of more than a few weeks, since I was 21. I am now 54 and have been out of work since the start of the year. I have had about one interview per month but have received rejection letters stating other candidates were a good fit, that the company wanted "new blood", and other hints that I was too old. Am I too old?
And now my spouse is about to risk a layoff. If both of us are without work for too long, I can only contemplate the worse. Suicide would be the only solution."

Outofluck,
PLEASE, please hang in there. This employment situation is not your fault! It's the economy. I work almost continuously from 18 to age 60. I put myself through a bachelors, masters, and PhD. I've been unemployed since June 2007. I am in my early 60s. May I suggest a book I am finding helpful, "ENCORE: Finding work that matters in the second half of your life," by Marc Freedman. In this terrible economy, many have had to find new ways to make money. I know the feeling of being overwhelmed with the anxiety and fear that you won't be able to pay your bills. I was also unemployed a few times when I was raising my daughter as a single parents. At least now I don't have to worry about her since she is 35 and doing well. I hope you and your wife can emotionally support each other now. Many things can help, like taking long walks together and talking about your fears and brainstorming new ways to make money.
And please change your screen name from "outofluck" to something like "YesICan."

Sorry for a few typos in my previous post. I usually proof my work better but was anxious to post quickly.
YesICan (formerly known as "outofLuck), I and many others care. I envy you because you have a spouse with whom to share this "adventure."

Yesterday I was behind a gentleman at the pharmacy who was born in 1917 - during the First World War. So he is 92 or close to it. I am middle-aged, but I find it hard to fathom everything he has lived through. These economic times are difficult - I'm going through some retraining between jobs myself - but I think it's important to take a long-term perspective. I also think about the 62-year-old lady featured in an article the other day who is training in medical technology for two years after her furniture making job in North Carolina was sent overseas. I do think the American people have been betrayed by the global financiers. Unfortunately, the old rules no longer apply, and people must be more resourceful in finding alternatives.

Don't kill yourselves just because you are unemployed or going broke.
As therapy I would suggest taking some time out from the endless, frustrating job search and informing your representatives, of whatever party, that you will hold them accountable on Election Day should they stall unemployment benefits, block rational mortgage reform, block the public option for health care, push tax breaks on companies and the wealthy instead of tax increases, or support piddling our wealth away on more defense spending.

sparkplug1, very well put! You hit all of the important issues.
The conservatives' trickle-down economics obviously doesn't work. Unemployment benefits in these hard times can make possible trickle-up economics. We have seen that when money is given to banks with the purpose of increasing credit for small businesses, home buyers, and individuals, the only results are increased income and ridiculously high bonuses for individuals who caused these problems. When money is given directly to consumers, they will spend most of their money on necessities like food and health care, thus increasing the demand which helps businesses increase supply, thus creating more jobs for the unemployed. Hunger and constant anxiety are not motivators. Unemployment benefits also reduce emotional depression in the unemployed enabling them to apply for available jobs. This is the direction of the current administration. Time to give up on the trickle-down approach. The current administration is heading in the right direction.

In these difficult and often tragic times we are living in I find it disturbing yet sobering to read the comment posted by " Out of Luck ". Suicide is definitely not the answer - OoL.. Believe me, it's no fun for the survivors of Suicide !!!
Some of my suggestions here may appear a little bit hard edged or flimsy, however, I well do my best to offer some suggestion to the Seriously - Long Term Unemployed...
who may be are 40 - 60 years of age...

First and Foremost - Lower your direct expenses by 10% a month for three months, and put the savings aside, if you can...

Second - Immediately start a discussion and support group - to be held at a local Hall or even better, the Library. At these meetings form strategies that will create employment or enterprising ventures for the group or focus on specific members or member.

Third - Be willing to try something new, or something you have always wanted to do, yet never allowed yourself to do because you were to busy working and just did'nt have the time.

Fourth - Volunteer in your local community - At the schools, retirement homes, sporting events, churches..

Fifth - Go to a trade show, there you'll be sure to find some tinder and kindling to restart the fire in your belly.

Sixth - Meditation and Prayer - Your two most powerful tools - Ones for clarification, the later for understanding..

Seventh - Visualization of where you want to go and be doing for the next year..

Once again I submit these suggestions with humility to my fellow men and women to whom these words are intended.